Currency Market Update: Rupee turns flat at 83.87 against US dollar in early trade

The Indian rupee pared its initial gains and turned flat at 83.87 against the US dollar in early trade on Tuesday, as positive domestic equity markets and a weak American currency was negated by the outflow of foreign capital.

Forex traders said softening crude oil prices supported the local unit and prevented its fall.

At the interbank foreign exchange, the rupee opened at 83.86 against the greenback, inched up to 83.84 before trading again at its previous session's closing level of 83.87 against the dollar.

On Monday, the rupee settled 8 paise higher at 83.87 against the American currency.

Over the past holiday-shortened week, the rupee showed minimal fluctuation and narrowly steered clear of the critical of 84-mark.

Investors are expected to remain cautious ahead of PMI data from the US and Federal Reserve Chair Jerome Powell's speech at Jackson Hole Symposium for any cues on rate cuts by the central bank.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading higher by 0.10 per cent to 101.82.

Brent crude, the global oil benchmark, declined 0.68 per cent to USD 77.13 per barrel.

On the domestic equity market front, Sensex advanced 188.93 points, or 0.23 per cent, to 80,613.61 points.The Nifty rose 60.15 points, or 0.24 per cent, to 24,632.80 points.

Foreign institutional investors (FIIs) were net sellers in the capital markets on Monday, offloading shares worth Rs 2,667.46 crore, according to exchange data.